theSun | MONDAY MARCH 16 2009 19

business
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G20 bridges differences

HORSHAM (England): Before
a key summit on tackling
the economic crisis, rich and
emerging nations have agreed
common ground on hiking
IMF funds and stricter market
regulation but remain split on
stimulus measures.
G20 finance ministers on Sat-
urday vowed to take “whatever
action is necessary” on the world
economic slowdown, after talks
preparing for a London summit
of world leaders on April 2.
They played down signs of
division between the United
States and Europe on how best
to boost the global economy,
insisting the road to the summit
next month was smooth.
“We’re prepared to take
whatever action is necessary to
ensure growth is restored and
we’re committed to do that for
however long it takes,” British
finance minister Alistair Dar-
ling said Saturday after hosting
the G20 talks.
“I believe this does provide
a very clear sense of direction.”
The politicians managed to
reach agreement on the need
for an “urgent” and substantial
funding boost for the Interna-
before key summit
tional Monetary Fund (IMF),
although a communique is-
sued afterwards did not state a
figure.
They also agreed to some
tougher regulation of the finan-
cial system.
But the meeting failed to
reach consensus on a new
stimulus package, despite
controversial calls from the US,
the world’s largest economy,
for coordinated international
pump-priming in recent days.
US President Barack Obama,
who will attend the London
summit in April, denied there
were divisions on how to tackle
the financial crisis, deriding
such a notion as a “phony” story
drummed up by the media.
“I don’t know where this no-
tion has emerged that somehow
there are sides developing with
respect to the G20,” Obama told
reporters after meeting Brazil’s
President Luiz Inacio Lula da
Silva at the White House.
Agreement on IMF funding
came after the US recently
suggested its lending capacity
should be trebled to US$750
billion. European leaders want
to double the figure to US$500
billion.
The G20 on Saturday stated
its key priority was restoring
bank lending to help ease the
effects of the crisis.
But Germany and France
are opposed to US’s call for
new stimulus, instead favour-
ing tougher regulation to tackle
the crisis.
French Finance Minister
Christine Lagarde said she
was “delighted” that the G20
was closer on agreeing tighter
regulation of markets.
The US, eurozone, Japan
and Britain are all in recession
as the global economy struggles
to recover from the worldwide
credit crunch that erupted in
late 2007.
Commercial banks are
lending less cash amid fears
about their exposure to the
collapsed US subprime property
market.
Also on Saturday, British
Prime Minister Gordon Brown,
who will host the G20 summit,
and German Chancellor Angela
Merkel talked up the prospect
of agreement on April 2. – AFP

Bailed-out AIG plans bonuses worth million$

WASHINGTON: Ailing insurer AIG – which re-
ceived US$180 billion (RM666 billion) in federal
aid – is to give out millions of dollars in bonuses
this week, according to a report on Saturday.
American International Group CEO Edward
Liddy told Treasury Secretary Timothy Geithner
bonuses could not be cancelled due to a risk of
lawsuits for breaching employment contracts,
the Washington Post said.
In a letter to Geithner – who has expressed
dismay over the payments – Liddy also indi-
cated a refusal to pay bonuses worth tens of
millions of dollars would prompt an exodus of
senior employees.
“We cannot attract and retain the best
and brightest talent to lead and staff the AIG
businesses – which are now being operated
principally on behalf of the American taxpayers
– if employees believe their compensation is
subject to continued and arbitrary adjustment
by the US Treasury,” Liddy wrote, according
to the Post.
The AIG bailout, which saw the government
taking a major equity stake in the firm, was
billed as an effort to stave off the collapse of
what had been the world’s biggest insurer.
Although AIG has agreed to cut back on
multi-million-dollar bonuses for its highest
ranking officers, others will receive full pay-
ment if the company’s restructuring is followed
through, the Post said. The firm’s lower-ranked
employees are still set for a massive pay day.
Bonus payments to thousands of employ-
ees totaling “in the hundreds of millions of dol-
lars” are to be given out, the daily reported.
For the fourth quarter, AIG announced a
loss of US$61.7 billion – the biggest ever for a
US firm in one quarter – pushing up its net loss
for 2008 to US$99.3 billion. – AFP